There are many people interested in former transportation companies, whether they were trucking companies, railroads, airlines or ocean lines. They are called “fallen flags,” and the term describes those companies whose corporate names have been dissolved through merger, bankruptcy or liquidation.
The Reading Railroad (pronounced “Redding”) was known officially as the Reading Company. It was one of a number of Northeastern railroads that was begun primarily to carry coal.
Unfortunately for the Reading and many other railroads, the use of coal declined significantly after World War II. Before the Reading’s decline, however, it was a “powerful system that, at one point, nearly cornered the lucrative coal market by holding stakes in virtually all of the region’s major railroads.”
Discovery of anthracite coal
Bituminous coal is a middle rank coal that usually has a high heating value but does not burn as cleanly as anthracite coal. In the United States bituminous coal is used primarily in electricity generation and steel making.
Anthracite coal is the highest rank of coal. It is often referred to as “hard coal,” and it contains a high percentage of fixed carbon and a low percentage of volatile matter. It burns cleaner than bituminous and other forms of coal.
Major deposits of anthracite coal were discovered in northeastern Pennsylvania during the mid-18th century. The issue was to transport the coal to the major population centers of the Northeast.
The canal era
Prior to the invention of the locomotive in Great Britain in the 1820s, the idea of transporting the coal by canals gained increasing support. New York State opened the Erie Canal on October 26, 1825, which ran from Buffalo to Albany, where cargoes could be transloaded on boats to go down the Hudson River into New York.
In Pennsylvania the state granted a charter to the Little Schuylkill Navigation, Railroad & Coal Company on February 28, 1826. The company planned to move coal from mines near the Panther Creek Valley to Port Clinton (about 20 miles away). At Port Clinton the coal could be transferred to the Schuylkill Navigation Company’s canal, which linked Reading and Philadelphia.
The canal opened in 1831; it used horses pulling carts over wooden rails equipped with iron straps. This method of transport was slow and seasonal. From the late fall through early spring the canals were frozen and unnavigable.
The Philadelphia & Reading Railroad
However, demand for anthracite continued to increase. To overcome the seasonality of the canal, the Pennsylvania legislature authorized the construction of the Philadelphia & Reading Railroad (P&R) on April 4, 1833.
The P&R was the earliest incarnation of the Reading Railroad’s operations. Its backers thought it could replace the canal by connecting Pottsville with Philadelphia via Reading along the Schuylkill River.
However, canal owners used money and political connections to delay construction of several railroads in the Northeast. The P&R was opposed by local canal interests; its first segment between Reading and Pottstown did not open until 1838.
However, the nation’s earliest railroads proved their all-weather abilities and the canals became secondary modes of transportation. On December 5, 1839, the P&R completed its line into Philadelphia (although its final extension to Pottsville did not open until 1842).
The 93-mile route of the P&R was the Reading’s only true main line. The remainder of its network consisted primarily of branch and secondary lines. The P&R hauled anthracite coal to Philadelphia. When a coal terminal opened at Philadelphia’s Port Richmond on the Delaware River in 1842, the railroad had an outlet for even more coal.
By 1844 the P&R carried nearly 43,000 tons of coal, eclipsing the volume moved on the Schuylkill Canal.
Acquisitions
The P&R grew more successful by hauling ever-increasing amounts of coal. It was able to expand through the acquisition of other railroads, “most of which branched in every direction away from Reading.”
The city of Reading, about 63 miles northwest of Philadelphia, became the P&R’s primary hub and where it located its major shop complex. The railroad’s growth into the Reading Company began in 1850 when it acquired a portion of the Philadelphia & Columbia Railroad.
The Lebanon Valley Railroad opened on January 18, 1858. It connected Reading with the Pennsylvania state capital of Harrisburg. Just two months later (on March 20, 1858) the P&R acquired the Lebanon Valley Railroad.
Among the P&R’s other acquisitions were the following:
- In 1869 it acquired the East Pennsylvania Railroad to Allentown.
- It acquired the Philadelphia, Germantown & Norristown Railroad via lease running to Norristown (a Philadelphia suburb) in 1870.
- The Catawissa, Williamsport & Erie Railroad was acquired in 1872, extending the railroad to Williamsport and Newberry Junction.
- It purchased the North Pennsylvania Railroad on May 14, 1879. This extended the P&R’s service to the important steel production center at Bethlehem.
- Also in 1879 the P&R acquired the Delaware & Bound Brook Railroad (D&BB). The D&BB had been incorporated on May 12, 1874; its importance was that it had built a rail line from Yardley (where it interchanged with the North Penn Railroad) to Bound Brook Junction (near Manville, New Jersey), where it connected with the Central Railroad of New Jersey. Later, the D&BB completed an extension of its rail line to Woodbridge, New Jersey. Port Reading was opened there in 1889 along the greater New York Harbor. A deep water port was constructed so that anthracite coal could be loaded onto trans-Atlantic ships.
The railroad began a decade of growth in 1870 when Franklin Gowen was elected its president. Gowen began the Philadelphia & Reading Coal & Iron Company in 1871 and sought to corner the coal market.
This subsidiary acquired mines for the railroad; by the end of the decade it controlled nearly 30% of the anthracite market. However, the company became overextended went bankrupt in 1880.
From 1870-1899, the P&R acquired nearly 100 different railroads or railroad segments. As the 1800s ended, the P&R prospered because demand for anthracite continued to grow.
Moreover, the P&R was not the only railroad in the region that was doing well by hauling anthracite. Among the other successful railroads because of anthracite were the Delaware & Hudson, the Lehigh Valley, the Delaware, Lackawanna & Western, the Jersey Central, the Lehigh & New England, the Lehigh & Hudson River and the New York, Ontario & Western.
The 1890s
After Gowen, a number of presidents ran the P&R. Then Archibald McLeod became president in 1890; he led the Philadelphia & Reading in what many historians consider its greatest period. He also sought to make the railroad into the dominant anthracite carrier.
Under Gowen the P&R began leasing the Lehigh Valley Railroad in late 1891. Soon thereafter it acquired stakes in the Central of New Jersey, Lackawanna and the Boston & Maine railroads. In addition, the P&R opened the Reading Terminal in downtown Philadelphia in January 1893. The terminal symbolized the railroad’s wealth and power at that time.
The P&R controlled the transportation of over 70% of the anthracite being mined in the region; and it appeared that the railroad would be the region’s largest railroad.
However, the financial Panic of 1893 wiped out fortunes around the nation and brought down McLeod. The company was forced into receivership (bankruptcy) and all of its rail and non-rail properties (except the CNJ) were reorganized as the Reading Company. The 1893 collapse meant the Reading was only a regional railroad, operating about 1,300 miles of track within eastern Pennsylvania and its New Jersey commuter lines.
The 20th century
Less than a decade after the Panic of 1893 the Reading was acquired by the much larger Baltimore & Ohio Railroad (B&O).
Because of the company’s condensed network of rail lines, the Reading could not prosper from the well-paying long-haul movements of merchandise freight that other railroads enjoyed.
However, the Reading joined the “Alphabet Route.” This consortium of railroads offered through service for shippers in the ultra-competitive Boston/New York/Chicago corridor as an alternative to the B&O, the New York Central and the Pennsylvania Railroad.
Another key change took place in 1923. In a corporate reorganization the Reading divested all of its non-rail properties due to antitrust issues. Despite its regional status, the Reading sustained a highly profitable and well-managed railroad into the 1950s due to its coal-hauling operations.
Reading’s passenger and commuter services
Following the Civil War, New Jersey’s beaches became vacation spots for those who could afford it in the greater New York City and Philadelphia environs. The P&R purchased the narrow-gauge Camden, Gloucester & Mt. Ephraim Railway in 1884.
The P&R rebuilt the railroad into a standard-gauge line. It also made other acquisitions over the next few years and then consolidated the various lines in southern New Jersey into the Atlantic City Railroad (ACRR) in 1889.
The popularity of New Jersey’s beaches continued to grow, and the P&R double-tracked the ACRR along its Camden to Atlantic City line. The ACRR developed a joint venture with the Pennsylvania Railroad’s West Jersey & Seashore Railroad in 1933, forming the Pennsylvania-Reading Seashore Lines. This was a successful commuter line that linked Camden with the Jersey Shore; it lasted until the formation of Conrail in 1976. Some of its lines are still in operation, handling both freight and passenger traffic.
Today, some of the Seashore Lines’ tracks remain in use by various agencies handling both freight and passenger assignments.
The Reading also operated extensive commuter services in greater Philadelphia. The railroad electrified these lines by the 1930s, and they extended from Reading Terminal to Norristown, Chestnut Hill, Doylestown, Hatboro and West Trenton. However, these operations lost increasingly more money as the years passed. This was a problem that most of the other Northeastern carriers faced as well. Unfortunately, they were forced by Interstate Commerce Commission (ICC) regulations to maintain these money-draining services until the industry was deregulated in 1980.
The railroad also operated several successful regional trains. The best-remembered is the Crusader. It catered to business clientele, and connected New York/Jersey City (in conjunction with the CNJ via Jersey City Terminal) with Philadelphia. The Crusader was quite successful and remained in service through the 1960s.
Decline and demise
Anthracite coal was the “cash crop” of the Reading Railroad for decades. However, that traffic began to decline in the 1920s and quickened after World War II. The Reading handled 16 million tons of anthracite and about 30 million tons of other freight in 1946. But the amount of anthracite coal being mined and shipped continued to slip; within 30 years it was carrying less than 2 million tons of coal annually.
The merger of the Northeast’s two major railroads – the Pennsylvania Railroad and the New York Central – into the Penn Central in February 1968 was a blow to most of the other Northeastern railroads.
The merger was a disaster for many reasons. Problems included an incompatible management team (the two railroads had been bitter rivals for decades) to ICC regulations that had damaged the industry for decades.
On June 21, 1970 the Penn Central declared bankruptcy; the Reading declared bankruptcy as well on November 23, 1971.
The Penn Central bankruptcy (the largest in U.S. history up to that time) caused Congress to pass legislation that created the Consolidated Rail Corporation, or Conrail. It would haul the freight previously carried by the Penn Central, the Reading and other Northeastern carriers that had also gone bankrupt. Congress also created Amtrak to carry the rail passengers formerly transported by the bankrupt carriers.
Conrail was made up of several of the bankrupt Northeastern carriers (including the Reading). It began operations on April 1, 1976. (To read a previous FreightWaves Classics article about Conrail, click here.)
Conrail scrapped a number of the defunct railroads, but many of the Reading’s principal rail lines were retained as it was absorbed into Conrail.
Some 23 years later, the Conrail system, which had become profitable during the 1980s, was split between two of the remaining Class I railroads – Norfolk Southern and CSX Transportation.
These railroads still operate what were segments of the Reading Railroad. Other former Reading sections have been sold to short line railroads (notably the Reading, Blue Mountain & Northern, which is a successful Class II regional).
Author’s note: This article would not have been possible without the resources made available by Adam Burns of American-Rails.com. Those interested in learning more about the railroads operating in North America – and those that are now “fallen flags” – should explore the American-Rails site.
(Photo: Adam Burns Collection/American-Rails.com)
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